The author is a Forbes contributor. The opinions expressed are those of the writer.

Loading ...

Loading ...

This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe

There's an old saying on Wall Street about insider buying: there are many possible reasons to sell a stock, but only one reason to buy. Back on May 30, Home Depot Inc's Director, J. Frank Brown, invested $79,660.00 into 1,000 shares of HD, for a cost per share of $79.66. Bargain hunters tend to pay particular attention to insider buys like this one, because presumably the only reason an insider would take their hard-earned cash and use it to buy stock of their company in the open market, is that they expect to make money.

In trading on Tuesday, bargain hunters could buy shares of Home Depot Inc (NYSE: HD) and achieve a cost basis 4.4% cheaper than Brown, with shares changing hands as low as $76.12 per share. It should be noted that Brown has collected $0.39/share in dividends since the time of their purchase, so they are currently down 4.0% on their purchase from a total return basis. Home Depot Inc shares are currently trading up about 1.4% on the day. The chart below shows the one year performance of HD shares, versus its 200 day moving average:

Looking at the chart above, HD's low point in its 52 week range is $49.77 per share, with $81.56 as the 52 week high point — that compares with a last trade of $77.14. By comparison, below is a table showing the prices at which insider buying was recorded over the last six months:

Purchased

Insider

Title

Shares

Price/Share

Value

05/30/2013

J. Frank Brown

Director

1,000

$79.66

$79,660.00

The current annualized dividend paid by Home Depot Inc is $1.56/share, currently paid in quarterly installments, and its most recent dividend ex-date was on 06/04/2013. Below is a long-term dividend history chart for HD, which can be of good help in judging whether the most recent dividend with approx. 2.0% annualized yield is likely to continue.

According to the ETF Finder at ETF Channel, HD makes up 9.11% of the Retail ETF (AMEX: RTH)which is trading higher by about 0.8% on the day Tuesday.